The SEC uses big fines to keep brokers honest. Oh well...LBHI?
It is never to late to learn from a bad experience or bad objection to compel or a good broker Mr. LBHI and Boss and Company:
"WEIL:\97841486\4\58399.0011
receiving any distributions from its affiliates until LBHI files the requested certificates. (Id.)
7
In
short, the relief sought in the Motion to Compel would harm LBHI’s actual creditors and should
be denied for that reason alone.
6. For their support, the Wossileks cite selectively from a prepetition
prospectus and, curiously, to Bankruptcy Code Section 510(a). (See Motion to Compel at ¶ 4; 11
U.S.C. § 510(a).) But the Wossileks don’t even try to explain how any prepetition contractual
obligations could apply to LBHI today. Nor could they if they tried.
7. With few exceptions not relevant here, LBHI has not been bound to
perform under prepetition agreements since September 15, 2008, and, since March 6, 2012,
LBHI’s only obligations to prepetition contract counterparties are those set forth or contemplated
by LBHI’s confirmed chapter 11 Plan.8
Clearly, no provision in the Plan provides for the
assumption of the Subordinated Guarantees or provides that LBHI would continue to perform
under the guarantees into the future. It would be administratively impossible and prohibitively
expensive for LBHI to continue to comply with all of its prepetition contracts in perpetuity.
Compelling LBHI to comply with any of its rejected prepetition contracts would open the
floodgates as LBHI attempts to wind down its estate. Such relief would not be in the interest of
LBHI’s creditors and finds no support in the Bankruptcy Code.
8. Moreover, the Motion to Compel should be denied because the relief
requested is unnecessary. The parties now claiming to lack information can only do so as a
result of either feigned or willful ignorance of the (i) the terms of the Subordinated Guarantees,
7 The Wossileks’ and the Joinder Parties’ purported investments have nothing to do with LBHI’s foreign affiliates.
The trusts in which they purported to invest hold subordinated debt from LBHI, not of any affiliate of LBHI.
8 See, e.g., Plan §§ 11.1 (“[A]ll prepetition executory contracts and unexpired leases that exist between [LBHI] and
any person or entity shall be deemed rejected by [LBHI]”); 13.1 (“[A]ll Property of the Estate of a [LBHI] shall vest
in [LBHI] free and clear of all Claims, Liens, Encumbrances, charges, and other interests, except [as provided in the
Plan].”); see also 11 U.S.C. §365.
08-13555-scc Doc 61063 Filed 03/05/21 Entered 03/05/21 12:50:13 Main Document
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